Coup Attempt Another Blow To Philippine Economy

MANILA — During the coup attempt against Philippine President Corazon Aquino, a rifle bullet pierced the plate glass window behind the chair of Mark C. Blacker, executive director of American Express InterBank.

The shot, which shredded draperies and eventually lodged in the ceiling above his desk, came during an attack on Manila`s financial district by the rebels.

While the assault failed to bring down the government, it is expected to worsen the Philippines` already burdensome economic problems.

The experience also failed to scare off Blacker, who also serves as president of the American Chamber of Commerce of the Philippines. He came to an opposite conclusion from the one that might be expected:

``If you`ve got the courage and a deep pocketbook, now is the time to come to the Philippines. The strengths are still here: a central geographic location and an under-utilized, well-trained labor force.``

Blacker`s endorsement of the Philippines is a common opinion among the foreign business community in Manila-despite the bloodiest and most serious coup attempt yet against the Aquino government.

``You might call it the Bernard Baruch philosophy of investing,`` laughed British investment counselor Victor Stewart. ``You buy when everybody else is selling, and you sell when everybody else is buying.``

There is a hint of nervousness in the bullish, stiff-upper-lip comments, however. And little wonder. For six days, from Dec. 1 to 6, the Makati financial district, heart of the Philippine economy, was a war zone.

Rebel troops commandered its towering office buildings and luxury hotels. They trapped more than a thousand foreign tourists and business executives in hotels and offices as the district`s broad streets became littered with shards of broken glass, shell casings and overturned cars.

Makati still is picking up the pieces. Some offices were literally shredded by 50-caliber machine gun bullets, grenades and other ordnance.

Most disturbing to the foreign business community is the now obvious fact that the rebel occupation of Makati was a well-planned attempt to go for the economic jugular of the Philippines` delicate economy.

Money, after all, is the blood of any economy. Shut off the blood supply and you can render a government unconscious. It was a strategy that came close to working.

``There is no question that the coup will be a monumental setback to our economic development,`` said Roberto Villanueva, Aquino`s chief economic adviser.

``Many of those trapped were not tourists,`` said Villanueva, referring to the many foreign representatives who, like Blacker, had direct experience of the coup attempt. ``You have to wonder what they will say to their home offices.

``Before this happened, there were 140 foreign firms who had inquired about investment opportunities in the Philippines. We will just have to wait and see how many are still interested.``

One of those apparently still interested is America`s Bechtel Corp., the giant construction and engineering firm, which is in the Philippines to shop around for opportunities as the nation gears up to build much-needed ports, roads and other facilities. There is $14 billion pledged from various donor nations, with Japan and the U.S. leading, over the next four years.

Former Secretary of State George Shultz, now a Bechtel director, arrived in Manila a day after the coup ended to announce that both he and Bechtel were still ``bullish on the Philippines.``

``From all I can see, the people who were here before the coup are going to stay and carry on,`` said Shultz. ``As for Bechtel, we have come to look around and the plan is for Bechtel to establish itself here. The Filipino people are an able and capable people and they will recover from this . . . and that will lead to more foreign investment.``

However, even as Shultz was talking, Tomas Prudencio, head of a Filipino group negotiating with two foreign plastic manufacturers to set up plants in the Philippines, announced that both firms had decided to ``defer`` their plans to invest because of the coup attempt.

The two firms, Cadillac Plastics Inc., of the United States, and Granton Industrial Corp., of Hong Kong, were interested in producing high-technology plastics, such as those used in the semiconductor industry. Cadillac had already committed $2 million in capital and revolving letters of credit, according to Prudencio,

Many other foreign investments are apparently on hold as boards of directors all over the world reassess the prudence of pouring millions of dollars into the Philippine economy.

Then there are the nation`s economic indicators-depressing even before the coup attempt. Even though the Philippines gross national product was growing at a respectable 5.6 percent in the first nine months of 1989, it lagged the 7.5 percent rate of expansion of a year earlier.

Inflation had soared to 13.4 percent in October and money lending rates were nudging 30 percent.

Even more distressing, said Villanueva, are the pressing ``bread and butter`` issues facing the Philippine economy.

``Our No. 1 concern right now is to address infrastructure issues such as roads, telecommunications, bridges and the living standards of the Philippine people,`` said Villanueva. Blacker agrees.